Quick Definition

An economic moat refers to a business's ability to maintain competitive advantages over its competitors in order to protect its long-term profits and market share.

Examples

• 1A pharmaceutical company holding patents for its drugs, preventing competitors from producing generic versions.
• 2A technology firm with a proprietary operating system that dominates the market, like Microsoft's Windows.
• 3A retailer like Walmart benefiting from economies of scale that allow it to offer lower prices than competitors.
• 4A beverage company like Coca-Cola with strong brand recognition and customer loyalty.

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